Philippine President Gloria Arroyo has defended her decision to pull troops out of Iraq early to save the life of hostage Angelo de la Cruz.

She said she needed to consider the thousands of Filipinos working in Iraq who provide their country with much-needed remittance.

She also denied that she had damaged the ties between Manila and Washington.

Mr de la Cruz arrived on Friday in his village to a rapturous welcome and a huge celebratory banquet.

"It won't take more than three lines to summarise my case, and let me say them," said Ms Arroyo.

Manila's troops arrived home from Iraq earlier than scheduled

"One, I take responsibility. Two, I make no apologies. Three, I stuck to my oath [to save Mr de la Cruz]," she said.

"This is not a tale about politics. It is about human survival and diaspora. The Philippine economy will, for the foreseeable future, continue to be heavily dependent on overseas worker remittances. I have to look them in the eye and tell them I will fight for their better future."

The president highlighted how the Philippines' circumstances differed from those of the US and its other allies who have troops in Iraq.

"Unlike the US, Australia, Bulgaria and other countries, 1.5 million Filipinos live and work in the Middle East, and 4,000 are working in Iraq today," Ms Arroyo said.

If the Philippines is punished (by America), we are ready to
survive on dried fish and vegetables from our farms to prove that Filipinos can stand on their own and are courageous

"Arguably, the 4,000 private workers are more valuable to Iraq [than the peacekeeping contingent ]," she said.

US Secretary of State Colin Powell said on Thursday that he was "very disappointed" over the actions of the Philippine government.

But Ms Arroyo said the Manila-Washington relationship was robust enough to withstand the row over the hostage.

"No president can break that bond," she said. "Our partnership for a better world is stronger than ever. Despite the domestic problems that it sometimes causes, the military alliance with the United States is a strategic asset for the Philippines."

Despite the diplomatic wrangling, Mr de la Cruz has become a national icon.

Thousands of well-wishers lined the streets of his village - Buenavista, north of Manila.

Marching bands struck up as Mr de la Cruz drove home with his family, crowds mobbing the vehicle.

"I want to thank president Arroyo and our government," the 46-year-old truck driver told the crowd. "Our president gave first priority to saving my life. I won't forget that."

Villagers were preparing a feast which included three roast pigs, tilapia fish and Mr de la Cruz's favourite dish - beef stew and deep fried pork.

But Fely Reyes, Mr de la Cruz's cousin, said she was prepared to eat very frugally in the future if it helped Ms Arroyo stand up to the US.

"Now we need to repay her," she said.

"If the Americans are mad at her because she pulled out the troops, we are likewise mad at the Americans. If the Philippines is punished (by America), we are ready to
survive on dried fish and vegetables from our farms to prove that Filipinos can stand on their own and are courageous."